Vacationing the Halal way

June 2016

Travellers opting for Halal tourism are primarily Muslims but also include others outside the Islamic faith. There’s a lot Islamic finance can do to capitalize on its growth

The progress of the Islamic finance sector globally over the last few years has been quite impressive. Such has been the impact of the same, it has evolved as a viable alternative to the non-Muslim investor too. This buoyancy has spilt into almost all segments of life – travel being one. Muslim travel spending, making up nearly 11% of the global expenditure, has triggered the evolution of the Halal Tourism industry, which is making rapid strides world-over.

Wealth Monitor interacted with Ufuk Seçgin, Chief Marketing Officer atHalalBooking.com, UK to get an understanding on some of the primary drivers around this industry. He opines, “There are several factors which have come together contributing to the rapid growth of the halal travel sector. Firstly, the combination of rising disposable incomes coupled with offers is ensuring a visible change in travel and holiday habits especially among the younger generations (20-40 years’ age group). The usage of the internet has triggered the same, which in turn is ensuring the hospitality industry evolve itself continuously to cater to growing needs. The increase in the number of hotels targeting halal-conscious travelers is evidence to the same.”

So what categorises a halal-friendly travel? In its most strict form, it may be seen as a way of tourism that is aligned with Shariah law and traditions. This extends to the industry to involve travel for individuals who prefer to utilize services, facilities and activities compliant with Islamic principles. This would extend to the entire gamut of travelling – hotel, transportation, food, Islamic finance, amongst others. As Ufuk explains, “We have the biggest demand in the beach resorts category and here halal-conscious travelers’ most important preferences are the availability of women-only facilities, which are not just outdoor pools and women-only beaches, but also indoor pools, spas and gym facilities for women. Other preferences are children-friendly animation and entertainment programmes. This of course is over and above the basic criteria of alcohol-free premises, availability of halal food, prayer mats, etc.”

According to ‘State of the Global Islamic Economy Report 2015/16 by Thomson Reuters, Muslim spending on outbound travel across the globe reached USD 142 bn in 2014 (excluding Hajj and Umrah), and is expected to grow to USD 233 bn by 2020, a CAGR of 8.6%. The Kingdom of Saudi Arabia and United Arab Emirates remain the top source countries for this way of travel. However, the trend is soon catching up globally. HalalBooking.com, a market leader in the sector, recorded a significant amount of sales in France, Germany, Belgium and the Netherlands, followed by Scandinavia, Austria and Switzerland. This apart from the traditional strongholds of the CIS and UAE regions. In total, they have had bookings from customers in over 70 countries.

Asked as to which destinations are more popular among his customers, Ufuk explains, “Our biggest destination is Turkey. Here we have demand for the Antalya region at the South coast of Turkey, which has the highest density of halal-friendly beach resorts globally. At the same time, we also have a lot of demand for other destinations such as UAE, island of Lombok in Indonesia, Malta, Istanbul and Spain.”

Call it innovation or niche, the sector is bound to continue to move on an upward trajectory in years to come. Taking a cue from its counterpart within the finance industry, there is a reason enough to believe that as it spreads its wings, while remaining true to its name, Halal Tourism may evolve further keeping in mind the ‘socially-conscious’ or ‘family value-conscious’ traveller. As Ufuk summarises, “A significant percentage of our customers are not very halal-conscious in their daily lives, but enjoy the very family and children-friendly environment and choose for this reason to spend their holidays in hotels available on our website. From time to time we do also get enquiries from non-Muslim customers who for the above mentioned reasons prefer our hotels.”